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Eskom mum on steep hikes

Oct 11 2012 12:42

Johannesburg - Eskom has declined to comment on a news report that it would ask the National Energy Regulator of SA (Nersa) to almost double electricity prices over the next five years.

"We are busy finalising our application and will be submitting hopefully later this month," Eskom spokesperson Hilary Joffe said on Thursday.

The Sowetan earlier reported Eskom would ask Nersa for revenue totalling R1.7 trillion over five years.

This would see household electricity prices rising from 60c per kilowatt hour to 112c.

Joffe said the Sowetan did not have Eskom's "final numbers" as these were still being drawn up.

"We were ready to submit at the end of August but we were asked by government to do additional work."

The next five-year tariff period will come into effect on April 1 next year, and Nersa needs to make a decision by March.

"We are very keen to have South Africans engaging with the application and participate in the public process," Joffe said.

The Sowetan warned that price increases of this magnitude would have devastating consequences for poor households.

It could also threaten jobs in energy-intensive sectors.

However, below-inflation increases could threaten Eskom's credit ratings.

Further price increases would also force consumers to use less electricity.

One way to rein in electricity price hikes would be to keep coal costs under government control.

Coal accounts for 50% of Eskom's cost base.

However, this would reduce returns to mining companies, the daily reported.

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